The Brewers Association recently published the results from their third COVID-19 impact survey, aimed at gauging the state of the craft brewing industry. While things are far from rosy, as states begin to loosen restrictions, many craft brewers are beginning to see some light at the end of the tunnel.

The previous survey in April found that nearly 60% of breweries surveyed expected to be out of business in three months or less if conditions did not change. Fast forward seven weeks and this most recent survey finds that nearly 82% of breweries in the survey are either very or somewhat confident in their ability to remain open through 2020.

Confidence through 2020	%
Very confident	54.9%
Somewhat confident	27.8%
Unsure	11.6%
Somewhat pessimistic	3.4%
Very pessimistic	2.3%

(*For ease of display, table has been pared down from how it appeared in the original survey summary.)

When asked to compare how their optimism surrounding the future of their business has changed over the last month, more thn 42% of respondents said they had become either much more or somewhat more optimistic. As the table below shows, this is more than 18 percentage points higher than those whose outlook had become either much more or somewhat more pessimistic.

Attitude About the Future	Percent
Much more optimistic	10.2%
Somewhat more optimistic	32.2%
Same	33.6%
Somewhat more pessimistic	16.7%
Much more pessimistic	7.3%
Net Optimism	18.4%

There were a number of reasons given for this increasing optimism. The most frequently stated reason was that they had received government assistance in the form of Small Business Administration Paycheck Protection Program (PPP) loans. According to the survey, 85% of the breweries in the survey stated that they applied for a PPP loan, with 96% of them receiving funds. This means that 81% of survey respondents have received government COVID-19 assistance.

Another common reason for increased optimism was that states had either reopened or was about to reopen soon. In these reopening states, 56% of breweries eligible to do so have at least partially reopened, with an additional 24% saying they planned to reopen within the next few weeks.

Sales outpacing expectations and/or being able to create new sales channels were two other commonly provided reasons behind respondents’ optimism. As the table below shows, the number of brewers that have introduced new services since COVID-19 has expanded considerably. Looking at the 32% increase of brewers offering delivery, it’ll be interesting to see how many decide to continue to offer this service going forward and if it will lead to a permanent expansion of direct brewer-to-customer sales. Perhaps not surprisingly, with so many restaurants and bars being closed, the one area that did see a decline was the percent of brewers using traditional distribution.

Sales Method	Before	Currently	Change
To Go	86.2%	94.4%	8.2%
Via Delivery (Delivered by Brewery)	2.9%	33.4%	30.5%
Via Delivery (Delivered by Third Party)	3.5%	7.2%	3.8%
Delivery (Total)	5.8%	37.5%	31.%8
Direct to Consumer (Shipping)	7.6%	12.4%	4.8%
Distribution (Self or Partner)	77.1%	65.6%	-11.5%

Despite many feeling increasingly confident in the state of their business, this survey shows that there’s still a long way to go before the craft brewing industry fully gets back on its feet. Survey results show that brewery sales have declined by almost 31% from pre-COVID-19 levels. (Note that due to smaller breweries being overrepresented in the survey sample, the Brewers Association estimates the true industry number to be closer to 20-25%.)

Furthermore, in their previous survey, they noted that of the more than 15,000 employees working for participating breweries, 66% had been laid off and/or furloughed. No update was provided on this figure in the latest survey summary. With breweries beginning to reopen, one would assume this number has improved, but how much is an open question.

While things still have a long way to go before the industry returns to the booming days before COVID-19, there’s a clear and growing sense of optimism. With so many brewery owners and employees being negatively impacted, fingers are crossed that the positive sentiments represented in this survey continue and we’ll soon be able to put this epidemic firmly in our rearview.

Notes on survey methodology: Of the 8,150 active craft breweries in the U.S., 859 participated in this survey, meaning that more than 10% of all breweries are represented in this survey. The survey over indexes for smaller breweries so some weighting was used to create industry-wide averages. To view a more detailed summary of the survey and its methodology click here.

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